The Week Ahead: Greene King, Sports Direct, Poundland and Persimmon under the spotlight
- Credit: Archant
Sports Direct International’s latest bonus plans for founder Mike Ashley will be in the spotlight this week week alongside results from Greene King and Poundland.
Sports Direct will again pit itself against its shareholders as the retailer makes its third attempt to pass a bonus scheme for founder Mike Ashley at an investor meeting on Wednesday.
Two shareholder groups have already declared against the 2015 bonus scheme at the retailer, which runs around 670 sports stores in the UK and Europe.
Sports Direct wants to grant 25 million shares, worth around £200million, among 3,000 employees, including Mr Ashley, who also owns Newcastle United FC.
However, the Local Authority Pension Fund Forum, which represents 60 local councils with combined assets of £125billion, and Pensions & Investment Research Consultants (Pirc) will recommend that their members reject the proposal.
A Pirc spokesman said: “Pirc is concerned that there are no individual limits in the bonus plan, and that individual awards may be excessive.”
Mr Ashley’s allocation of the bonus scheme will be decided later by the firm’s remuneration committee if the meeting passes the plan.
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Sports Direct dropped a scheme to award Mr Ashley more than £70m in April after shareholders raised concerns that it was not in line with corporate best practice and did not include other company executives.
The business also failed to win enough investor support for a bonus plus for Mr Ashley in September 2012.
To achieve the payout under the latest proposal, the firm’s earnings would have to hit £480m at the end of the 2016 financial year and rise to £750m by 2019. Last year the business posted annual underlying earnings of £287.9m.
Mr Ashley, who is deputy executive chairman at the retailer, has not received a salary or bonus since the retailer floated in 2007, netting him £929m.
Bury St Edmunds-based pubs and brewing group Greene King will be expected to lay out its latest plans for growth when its posts its full year results on Thursday.
The company pulled out of the running to buy 173 pubs from Orchid last month, with the sites later being sold to All Bar One owner Mitchells & Butlers for £266m.
At the beginning of May Greene King sold 275 tenanted and leased pubs to Hawthorn Leisure for £75.6m and said it aimed to trim the size of its tenanted estate further, to 750, by 2020, compared with a previous target of 1,200
Like a number of pub groups, Greene King, whose brands include Hungry Horse and Loch Fyne, is trying to weed out less profitable pubs from its esate, which are often tenanted rather than managed.
In contrast the firm wants to boost its managed pubs estate to 1,200, by adding at least 30 pubs a year, in the same period.
When chief executive Rooney Anand pulled out of the Orchid sale process he reiterated that his plans to expand the firm’s managed pubs remained in place.
However, brokers at Deutsche Bank said they would want to hear more about Mr Anand’s plans for disposing of less profitable pubs and adding to the managed house estate, which the failed Orchid deal would have done in one stroke.
The full-year market consensus for Greene King is for earnings of £326.1m on sales of £1.3bn.
Discount retailer Poundland should show a decent start to life as a public company when it posts its annual results on Thursday.
The company, which has 528 stores in the UK, is expected to post underlying earnings of £52.6m on sales of £988.5m. This compares to underlying earnings of £45.5m a year ago, on sales of £880.5m.
Poundland opened 70 stores last year and plans to open 60 more in the UK and Ireland over the coming 12 months. It has a long-term UK target of 1,000 shops.
Brokers at Oriel said the chain was able to expand so rapidly because as household budgets have tightened in recent years “Poundland is right on the customer’s wavelength at the moment.”
Poundland also plans to launch 10 trial stores in Spain over the next two years, and analysts expect an update on these plans in the results.
Housebuilder Persimmon, which also trades as Charles Church and Westbury Partnerships, will give an update on second quarter trading on Wednesday.
In April, Persimmon reported current total forward sales of £1.87bn for 2014, a 35% rise on a year ago, and said its weekly private sales rate per site was 25% ahead of the previous year.
The market consensus for Persimmon’s full-year results is for sales of £2.5bn on an adjusted pre-tax profit of £439.6m, compared with revenues of £2.1bn and profits of £329.6m a year ago.
The company is committed to its plan to return about £1.9bn of cash to shareholders by 2021. The second payment in the plan of £213m, or 70p a share, will be made to shareholders on July 4.